Link Between White-Collar Crime and Gambling Refuted

WASHINGTON, D.C. — Results of the most comprehensive examination to date of the impact of casino gaming on white-collar crime “do not support the claim that casino gaming contributes significantly to trends in embezzlement, forgery, and fraud.”

The study, written by Jay Albanese, Ph.D., a professor of criminal justice at Virginia Commonwealth University in Richmond, Va., found a net decrease in arrests for white-collar crimes in the largest casino jurisdictions from 1988 to 1996, based on an analysis of arrest data in these communities obtained from the FBI crime reporting unit. This finding was reinforced in a comparison to similar-sized destinations that do not allow casino gaming, revealing “no unique white-collar crime impact in casino markets.”

“It’s become all too easy for people to point a finger at casinos as a cause for all kinds of social ills without the facts to back up their claims,” said Frank J. Fahrenkopf, Jr., president and CEO of the American Gaming Association (AGA). “The Albanese study shows that if you look at the actual data compiled by federal and state authorities, you see that the incidence of white-collar crime has nothing to do with the introduction of casino gaming into a community. What we also see in this study is that the reasons people commit these crimes are rarely as simple as gaming critics would like to believe.”

The findings of the study are based on the examination of several kinds of data on crime and offender trends in five different ways: 1) Trends in embezzlement, forgery and fraud both before and after the introduction of casino gaming in nine of the largest casino gaming jurisdictions; 2) Embezzlement, forgery and fraud arrest trends in two comparable jurisdictions without casinos; 3) Comparison of these city-by-city trends to national trends in embezzlement, forgery and fraud during the last decade; 4) Content analysis of newspaper articles mentioning embezzlement and gambling during a 10-year period; and 5) Assessment of the reasons offered by people arrested for embezzlement to examine the extent to which gambling was a causal factor.

The study not only found no connection between casino gaming and white-collar crime in the largest casino gaming communities, but also found considerable differences compared to national trends. For the crimes of fraud and forgery, casino jurisdictions reported significant decreases in arrests, whereas the nation as a whole experienced considerable increases. Arrests for forgery in casino jurisdictions declined 27 percent from 1988 to 1996, compared to a nationwide increase of 21 percent. Arrests for fraud in casino jurisdictions decreased 12 percent from 1988 to 1996, while increasing nationwide by 25 percent. “This suggests that the presence of casino gambling did not contribute to the national increase in forgery and fraud arrests,” the study concluded.

The study did acknowledge that arrests for embezzlement in nine of the largest casino jurisdictions increased slightly, by 1 percent since 1988, while nationwide arrests decreased 2 percent. To investigate this finding further, Albanese reviewed the results of interviews with several hundred convicted embezzlers. These interviews revealed that no single factor causes embezzlement. While 9 percent listed “vices” (gambling, drugs or alcohol) as one of the 13 personal characteristics believed to be important factors behind the fraud, the interviews revealed that these characteristics were the offender’s rationalization rather than the actual motivation to commit that crime. Instead, it is the way in which a person defines a problem as “non-shareable” or as “threatening to family stability” that leads to embezzlement. “Given the results of interviews with several hundred embezzlers, it is clear that gambling does not cause white-collar crimes,” the study concluded.

The study, titled “Casino Gambling and White-Collar Crime Crime: An Examination of the Evidence,” was funded through a grant from the American Gaming Association. For copies of the study, please contact the AGA at 202-637-6500.

The AGA represents the commercial casino entertainment industry by addressing regulatory, legislative and educational issues. The association serves as a clearinghouse for information, develops aggressive educational and advocacy programs, and provides leadership on issues of public concern.